Canberra: Carbon Bill passes

The Age 12 October 2011

The vote in the lower house, which was applauded by Labor MPs and spectators in the public gallery, was a crucial test for the government, given its wafer-thin majority. The bills will now go the Senate for debate but will pass comfortably with help from the Greens, probably next month.

After the vote, Prime Minister Julia Gillard embraced Climate Change Minister Greg Combet, who had the difficult job of steering the policy, and even exchanged a peck on the cheek with Foreign Affairs Minister Kevin Rudd, whose reported ambitions to retake the leadership are proving a headache for the Prime Minister.

Under the legislation, about 500 of the biggest carbon-emitting companies in Australia will pay a price for each tonne of carbon. Most of the biggest emitters are electricity generating firms, mining companies and heavy industry manufacturers.

To compensate households, the government is cutting income taxes and boosting payments such as pensions and other benefits, as well as offering various lump sum payments.

The average household is expected to pay about $9.90 a week in extra living costs, including $3.30 on electricity.

However this will be offset by an estimated $10.10 in extra benefits and tax breaks. The Australian scheme will cover about 60 per cent of Australia's emissions, making it the most broad-based in the world.

Shortly before the vote, Mr Combet told ABC Radio that today was the culmination of a long and often gruelling debate.

"Look, it's been a very bruising political argument, that's quite right," he said. "If you fast forward 12 months' time and the legislation is through, the carbon price, emissions trading scheme, is in place and the economy is managing to deal with the reform, the cost impacts are modest as we have been saying, we'll have applied tax cuts and increases in the pensions and family tax benefits, nine out of 10 households receiving some assistance to adjust with this reform."